Microsoft's Stack Ranking review process predetermines the number of good, bad and mediocre reviews the company gives to its employees.

Microsoft uses a 1 to 5 scale, with 1 being the best and dictates that 20% of employees get a 1, 20% get a 2, 40% get a 3, 13% get a 4, and 7% get a 5. Those people probably get fired, explained anonymous Microsoft blogger Mini-Microsoft in one of his many blog posts about it.

This turns teammates into competitors. No matter how well a team does, most of them will get a mediocre review and a few will be scapegoats. It also means the best people at the company don't want to work together because only one person can be the top ranked employee in his or her group.

Patrizio's source, an unnamed Microsoft employee, also shared these details:

Although Steve Ballmer is credited as the architect of the review process, when top HR manager, Lisa Brummel, took over in 2005, she promised to fix it. Instead she's instituted a series of tweaks that sometimes made it worse. This made Brummel "perhaps the most universally hated exec in the place," the employee said.

Employees who are in the lower rankings (3,4, and 5) effectively can't transfer to other departments within the company, the employee said. This is unfair because they might be struggling in one group, but would be able to flourish in another group. (Heck, they might not even be struggling, but someone has to get a 3, 4, or 5.)

Groups are also ranked against each other. Managers then have to fight amongst themselves to get resources for them.

There are two review seasons, meaning this process -- and the stress of it -- goes on almost all year long. It also means people are working with very short term goals in mind.